White House Says It Can't Legally Let People in Multiemployer Plans Get Subsidies

WASHINGTON—The White House said late Friday that it can't legally make the primary change unions are seeking to the new health-care law, a long-simmering dispute between President Barack Obama and one of the main backers of his signature domestic initiative.

The announcement, a big blow for unions, followed an hourlong White House meeting involving several top labor officials, Mr. Obama, Vice President Joe Biden, Labor Secretary Tom Perez and top Obama advisers. It comes as union membership is declining, wages are stagnant...